Barclays note that "a high-yielding USD is...>

AUSSIE: Barclays note that "a high-yielding USD is providing increasing

competition for global portfolio flows & is likely to keep downward pressure on

the AUD, given Australia's dependence on global savings. Escalating US-China

trade tensions are also likely to contribute to AUD underperformance versus both

G10 & EMFX, given the country's large exports to China and the negative effects

of slowing Chinese activity on global commodity prices. The high quality of

Australia's exports, however, may provide some offset. Australia's agricultural

exports are largely consumed by China's middle class, a group that is likely to

continue to grow, and if an increasing portion of US agricultural exports to

China are subject to tariffs, demand for Australian alternatives may increase.

Domestically, GDP growth is relatively strong (above potential), but consumption

remains cautious & inflation low. AU house price pressures continue to moderate

in response to macroprudential. The AU labour market continues to exhibit little

sign of capacity pressure. Given the continued lack of inflation pressure, we do

not expect the RBA to hike until H120, which implies the U.S.-Australia policy

rate differential is likely to widen."